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IMPORTANT NEW DECISION ON PUNITIVE DAMAGES


Wilson v. U.S. Security Assocs., Inc.

Pennsylvania Superior Court

2017 Pa. Super. 226

Decided: July 18, 2017

Appellate Court grants judgment notwithstanding a verdict and overturns a jury award of over $38 million in punitive damages arising out of a workplace shooting at Kraft Foods that killed two co-workers.

Background

In an opinion from the Pennsylvania Superior Court filed on July 18, 2017, the court overturned a punitive damages award of $38 million in a case from Philadelphia County.  The underlying facts concerned the 2010 shooting deaths of two female co-workers at Kraft Foods, who were shot by a disgruntled female employee.  Kraft had security at its facility, but when one of the guards was confronted by the shooter with a .357 magnum, the guard let her in and then did not notify Kraft in time for Kraft to activate its active shooter protocol.  By the time Kraft received notice, it was too late.  The failure of the guard to timely notify Kraft was the gravamen of the negligence claim against the security company.

In two consolidated actions, Plaintiffs’ request for punitive damages were first met with preliminary objections.  In response, Plaintiffs entered into a stipulation to withdraw their request for these damages and dismiss them without prejudice, while also agreeing to strike the following words from the relevant paragraphs of the complaint, “reckless,” “outrageous,” “intentional and/or wanton.”  The striking of these words was also made without prejudice.

In October of 2014, Plaintiffs’ counsel filed a motion for leave to amend to add punitive damages to the complaints.  Defendants opposed, but the Court reserved its decision until the time of trial.  Trial began in February of 2015 and on the fifth day of trial, and after a weekend, the Court granted the motion to amend. The punitive damages subsequently awarded were 36 times higher than the compensatory damages.

Holding

On appeal, Plaintiffs argued that the trial court was correct in granting the motion to amend since the claim for punitive damages was “merely a revival of an element of damages incident to an existing cause of action.”  Plaintiffs argued that allowing for punitive damages would simply amplify the original causes of action, noting further that the claims were withdraw by stipulation without prejudice.  However, the Superior Court disagreed, holding that the Trial Court committed an abuse of discretion and an error of law.  The Superior Court opined that the claims for punitive damages were not based upon the original  factual allegations of “ordinary negligence” contained in the complaints, but rather wholly new facts supporting a new cause of action based upon “reckless indifference” and “active misrepresentation.”  Since the motion for leave to amend was filed four years after the shooting and sought to add a new cause of action based on facts “greatly different from those contained  [in the complaint]” to support Plaintiffs’ request for punitive damages, there was no legal basis to grant the motion when the statute of limitations had already expired.  Although Plaintiffs argued that the withdrawal of their claims for punitive damages was without prejudice,the Court stated that those two words did not toll the statute of limitations indefinitely.  Rather, tantamount to a voluntary non-suit where Plaintiffs still must re-file the claim within the statute of limitations, this set of facts must be treated the same as “settled controlling authority treats the withdrawal of an entire suit.”

The case is also notable for its discussion and application of the increased-risk-of-harm doctrine.  It can be anticipated that the Plaintiffs’ bar will cite this case for the application of the doctrine beyond the medical malpractice context.  However, the Court nonetheless recognized that the doctrine applied because a duty to protect under Section 323 of the Restatement (Second) of Torts arose in respect to the security-service defendants.  That is the same rationale the Court used to apply increased risk of harm in Hamil v Bashline, inasmuch as a doctor undertakes the duty to care for his patients.  Hence, this case does not represent any extension of the doctrine beyond that previously recognized Restatement Section 323 context.

Lastly, the court held that Pennsylvania law does not allow recovery of damages for “pre-impact fright” or “pre-shooting” damages since long-standing Pennsylvania law only permits recovery for conscious “pain and suffering and emotional distress occurring after the time of injury.”

Questions about this case can directed to Joe Holko, at (610) 332-7005 or jholko@tthlaw.com.